Arrowhead Pharmaceuticals, Inc. (ARWR) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Arrowhead Summer Series of R&D Webinars Part 4. [Operator Instructions] This event is being recorded and a replay and a PDF version of the slides will be available on the Arrowhead website following the conclusion of the call. I would now like to turn the call over to your host, Vincent Anzalone, Vice President and Head of Investor Relations. Please go ahead.

Thanks so much, Sarah, and thanks, everybody, for joining us today. Before we start, I just want to make sure that you know that we will be making forward-looking statements, so we refer to the risk factors in our SEC filings. And so this is Part 4 of our Summer Series of R&D Webinars. We started with muscle in May. We had cardiometabolic in June. We did the pulmonary programs in July. Today, we're doing obesity and metabolic. And then next month will be the final installment of the Summer Series where we'll cover our growing CNS portfolio. So the goal and I've said this on each one, so I'll go quickly. But the goals of this Summer Series is to provide more focused time so we can cover parts of our pipeline that we just don't get to talk about in depth. We also want to talk about advances that we're making to the TRiM platform broadly and that's definitely applicable today where we'll go over the TRiM platform's ability to get directly to adipose tissue. You can hear directly from the team members that work on these programs day-to-day. And then finally get some external perspective from a physician scientist that's an expert in the field. So today, we'll quickly -- I'll finish quickly and then I'll turn it over to Dr. Carel le Roux, who will go over the obesity space generally and what's remaining, where there's still unmet need. Erik Bush will cover our INHBE program, which we have disclosed previously. Tao Pei will then talk about the TRiM platform and how we're getting directly to adipose tissue. Erik will come back and talk about the newly announced program that we press released earlier today called ARO-ALK7, which uses that adipose delivery system. James Hamilton will talk about the upcoming clinical trials for both of those drugs, and then I'll give you some key takeaways. And then we'll have some time for Q&A at the end. So I just wanted to introduce Dr. Le Roux before we move on. We are very lucky to have him, he is an expert in the field of metabolic medicine and obesity. He's the Chair of Metabolic Medicine at the University College Dublin School of Medicine. And again, we are very fortunate to have him today. So please feel free to ask as many questions of him as you'd like. Arrowhead, most of your investors, you have seen this quite a few times, but Arrowhead is an RNAi therapeutics platform company. We've got a broad pipeline of 14 clinical stage assets that are across therapeutic area. We have a good mix of early, mid- and late-stage programs and actually 1 that's approaching commercialization, we hope to launch next year, our first commercial product. Our pipeline spans the ultra-rare disease all the way up to the most highly prevalent cardiovascular disease, including obesity programs we'll talk about today. All of our programs are built on our proprietary Targeted RNAi Molecule technology platform. It's designed to induce deep and durable gene silencing using the RNAi mechanism. And we feel like Arrowhead is the clear leader in the field of filling the promise of bringing RNAi to where diseases live, not just in the liver, but to several different tissue types throughout the body. And again, today, we'll talk about an additional expansion of that TRiM platform into adipose tissue. And then lastly, we think we have the financial resources to really exploit all of these assets. So here's our platform. Again, it's large and broad and it covers many different therapeutic areas. You won't see ARO-INHBE or ARO-ALK7 on this pipeline chart just because we're -- we only cover clinical-stage assets in our pipeline chart, they will be added shortly. We did mention this in the press release, but our goal is to have regulatory interactions and filings before the end of the year and start clinical studies for both new programs shortly after that. So now I will turn the call over to Dr. Le Roux.

Well, thank you very much, and it's a pleasure being here with you. And I sort of start with this very famous painting that hangs the London Gallery of Copernicus. And at the time, you may remember that the really smart people, probably similar to the people on this call, at least, they understood that the Earth was round. But Copernicus just came with this new science and actually said, turns out that your lived experience, the things that you saw every day happening, which was that the sun came up in the East and it went around and set in the West. And therefore, people assumed that the Earth must be the center of the universe because they saw the Sun going around them. And he actually came with his science and showed actually, they were 180 degrees wrong because it turned out that the Earth is rotating around the Sun. And of course, by knowing the new scientific details, we could interpret our natural world so much better. And I think we had 1 of these Copernicus moments at the moment because most of us on the call will think that overeating causes the disease of obesity. But what we are now seeing is probably the opposite of this. The disease of obesity causes people to overeat. And it's this new science that brings new opportunities that we would like to explore. Now I work with lots of different companies, including Arrowhead. And what we have understood is that what you would see on the right-hand side, that's Sisyphus, our Greek character that was strong in the depths of Hades. And what he had to do is roll this rock up this hill every day, and every day he got to the top, the rock would roll down. And that is what I and many of my specialist colleagues used to do is we ask people to eat less and move more. And now we understand that was like asking Sisyphus to roll up this rock because it would just roll down. And what we want to do now is we want to remove the rock. We want to treat the disease of obesity so that we could actually have better outcomes. But what we've understood is that we need more different treatments, where we need more nutritional therapies, more pharmacotherapies and more surgical therapies because that is the only way we're going to address this disease. Now if you look at how successful we have been back to the 1960s, the top line there indicates bariatric surgery. And you could see if you had a gastric bypass in the 1960s, you would lose exactly the same amount of weight that you would lose today. It was much safer to do the operations now than it was back then. So safety has improved dramatically, but efficacy did not improve. And the same with the green line over there indicated as intensive lifestyle therapy. You could see that if you had an intensive lifestyle approach back in the 1960s, you would lose exactly the same amount of weight that if you have lifestyle approach with all the apps that you can dream about in 2023 and 2024, you get about 5% weight loss. But what has changed in the last 3 and 4 years dramatically is pharmacotherapy. And the fact that it can be scaled is tremendously valuable. And now we have effective treatments. But what I am seeing in clinic is that the majority of my patients do very well, but there's a large minority that are not responding to the really impressive treatments that we have today. So why is that? In the past, we were arguing that obesity is a disease, but now we actually are taking it 1 step further and suggesting to you that it's very unlikely that obesity is just 1 disease. It's much more likely that it's multiple diseases. So if you just think about on the X axis there, you have increasing in BMI and the Y-axis you have increase in cardiovascular risk. But what you will see are they are outliers. There are people who are discarded, people with much lower levels of obesity but that of a very high cardiovascular risk and some patients with very large BMIs but actually very low cardiovascular risk. So what we are now understanding is that it's probably more than 1 disease. And we've been able to lead a project in Europe called IMI SOPHIA project that we're trying to map patients on a so-called UMAP system where we were able to dissect and find these different subtypes. We call them people who are discordant for hypertension, for transaminases in the liver, for lipid profiles, for glycemia but also for inflammation. And by understanding these both in males and females, what we were able to do is look at the risk. And you can see that your risks are dramatically different. For example, if you are in the patient group that are discordant for inflammation and therefore, understanding the different diseases allows us to understand that we need more treatments. Now here, I'm showing you the STEP 1 extension study. This is with semaglutide. First of all, you can see the average weight loss is dramatic, 16% with semaglutide. But you would also see exactly what happens when people discontinue the treatment. And that happens at 68 weeks, where people then become ravenously hungry and regain their weight. And that's a major problem that we have at the moment is to actually increase the stay time of these medications. They are very good, but like all medications, they only work if people take them. And the side effects of the medication is 1 of the reasons why our stay time is not as good. So we need to improve that. We need to improve the side effect profile, and there's lots of work in that space. But it also means that if we can get different mechanisms and different treatments with lower side effect profiles, that can also improve our stay time because it's only when we do that, that we can have dramatic long-term health benefits. And here, what you're seeing is the GLP-1 classes and their therapy persistence or so-called statin, you can see dramatically how it changes within -- at 180 days, you're already down to about 50%. And this is something that we need to work on. So stay time is important. And part of that is driven by side effect profiles that we need to continuously improve. Because what happens, if you can continue the medication -- and here, again, I'm showing you the step 5 study with semaglutide as an example -- so if you can continue the treatment, what you can see is you can maintain the benefit. But look now over to the right-hand side. What you can see in those bar graphs is that more than 1/3 of patients will achieve more than 20% weight loss. And we call them the super responders. But now look on the left-hand side of that and what you will see even people treated with semaglutide is about 25% of patients that lose less than 5% of their weight. Okay? So we have responders and nonresponders. And very important to say, it is not the smart people who listen to me that lose a lot of weight or the people that don't listen, they don't lose weight. It is biology. So what we now need to do is a lot of patients are coming to us starting the medication doing very well, but other people looking exactly like them with the same levels of motivation are coming, starting with really good treatment and not losing any weight. Again, more evidence and reason why we need different treatments in the system to help those patients. And of course, the adverse events that we are seeing here -- and I'm showing you tirzepatide, a drug that's very well tolerated, really great drug. But you can see, we still see a substantial number of patients who have adverse events that's leading to discontinuation in the clinical trials. Now just remember, I run a lot of these trials, and we bend over backwards to keep people in clinical trials. We are far more successful in clinical trials than in clinical practice because we have more resources at our disposal. But you can see despite our best efforts, people discontinue the treatment because of side effects. So this is a well-tolerated drug. It's a good drug, but you can see despite that, there are patients that can't tolerate the medication in the long term. So 1 of the issues that we are really grappling with at the minute is that when we get people to lose a substantial amount of weight. We see that most of it is adipocytes, or fat mass, but we also see some lean muscle mass loss. And here, I'm showing you both for semaglutide as well as for tirzepatide. So what we are trying to understand is how can we get maximum adipocyte loss and fat mass loss but actually maintain the muscle mass. Because if we can do that, we can further improve functionality. And that is what drives patients' quality of life. And that is also what provides value to patients. That's the value proposition for people having these medications in the long term. It turns out, weight loss isn't enough of a value proposition to continue the medication. You actually have to have health gains. And certainly, functional gains is part of that discussion. So how about targeting a completely different mechanisms? Because for example, semaglutide, tirzepatide, a lot of the [ Gutterman ] classes of medication are targeting the subcortical areas of the brain, very effective place to target. But you can see there are some people that have a disease that is not situated in that area. So can we target adipocyte because that is also central to metabolic disease. And we're going to hear more about that on the call today. So let me summarize and suggest to you that 500 years ago -- this is a typical painting from Botticelli that depicting Dante's Inferno. And you'll remember, Dante depicted the 7 mortal sins. And 2 of these sins, 1 was sloth and another 1 was gluttony. And therefore, European thinking was driven by this idea that to be simple is a willful act. And therefore, we thought that obesity was a choice. And that's why we even had terms like behavior therapy, teaching people how to behave. And now we just understand it as a biological disease that we can approach for a biological angle and when we give biological treatments, we get biological results. And it's completely transformed the way you and I think about obesity because now all we do is we treat it like a chronic disease that it is, and that's why we're so much more effective at doing that. So allow me to conclude and suggest to you that the future of obesity care will include chronic treatments that's aimed at health gain, not weight loss. And recognizing the biological basis of the disease will allow us to treat it that much better. But we need more and different treatments to address the subtypes of this disease if we're going to be successful. So I'm handing back to Erik, and I'm happy to take some questions later.

Thank you, Dr. Le Roux. Very nice setup for us here. So I'm happy to give a brief update today on ARO-INHBE. This is our first clinical program in obesity. And we'll be talking in some broad themes this morning about a couple of different aspects of emerging themes in obesity. And I just want to pause and highlight the power of human genetics to uncover novel therapeutic targets and pathways that have not previously been appreciated and may very well be best fitted and suited for novel and emerging therapeutic modalities like RNA interference. So the key pathway that we'll be talking about here first is a new pathway that's been described in recent years that connects the liver to adipose depots to regulate energy homeostasis. So there, the gene inhibit subunit beta E or INHBE is expressed primarily in liver tissue and hepatocytes, a cell type that we can deliver siRNA to very effectively. So in settings of excess chloric intake and increased triglycerides, this gene responds and creates a protein product from that gene, which is active and E. It's a dimer. And it is secreted by the liver and moves into circulation. It's referred to as activin E. It's a potent hepatokine. And the cognate receptor for activin E is ALK7. And ALK7, as we'll hear about later, is a TGF-beta superfamily member that's primarily expressed in hepatheon adipocytes. And signaling through the ALK7 receptor in response to activity ligand has a number of broad effects, but most prominently, suppression of lipolysis in adipose tissue, which can drive adipose hypertrophy and increasing visceral adiposity and insulin resistance. So as I mentioned, this is a genetically validated target, and this has emerged from a number of human GWAS studies in recent years, demonstrating that rare putative loss of function variants at this locus, INHBE, are clearly associated with reduced abdominal fat. Here, we're looking at waste to hip ratio and the main figure. And then looking off to the right, Also, these loss of function variants of INHBE are associated with lower risk of metabolic disease such as coronary heart disease and type 2 diabetes. So strongly validating this hepatocyte target in these indications. So moving back to sort of preclinical models and how we've thought about this and studied it, context here for background, the INHBE knockout mice have been studied on high-fat diet, as you might expect, fairly rigorously. And these animals exhibit reduced body weight gain and increased lipolysis when placed on a high-fat diet. So if you look in this graph, animals over 16 weeks here in black, on the high-fat diet, wild-type controls, they gain substantial weight. And the dark blue line right underneath that, these are the INHBE knockout mice that gained weight at a slower rate relative to their wild-type controls. So moving on from there. The concept here for ARO-INHBE is relatively straightforward. We can make GalNAc-conjugated siRNAs optimized to silence inhibit mRNA and hepatocytes and deliver very effectively. And consequent to delivery, we silence circulating activin E hepatokine. And downstream of that, silence activation of the ALK7 receptor on adipocytes, thus restoring lipolysis and consequently reducing adipocyte hypertrophy and adipose -- adiposity. So back to preclinical work with hepatic INHBE silencing. Our typical MO in this respect is to make a tool trigger to the rodent, INHBE gene, administer this to animals a model of diet-induced obesity and try to phenocopy what's known in the knockout mice. So that's what's done here. So this is an INHBE siRNA tool trigger as a GalNAc conjugate for liver delivery. A word about this animal model diet-induced obesity, this mouse model of diet-induced obesity. This is an intervention model where animals have been placed on a high-fat diet for 10 to 14 weeks. So they already have enhanced increased body mass before we incept siRNA treatment. So what you're looking at here is the next 16 weeks of treatment on therapy. So what we found here is that mice on this high fat diet treated with the INHBE siRNA, we got very deep suppression of INHBE mRNA in the liver. As you see on the right, greater than 90%, not down. And if you look at the body weight change graphs on the left, we see that animals receiving the INHBE siRNA regimen had nearly a 20% suppression in body weight gain relative to the vehicle controls. So moving from -- on to body composition analysis by Dexa scan. Some of you may be familiar with this assessment, looking to the right. We see representative images of these obese mice on sailing control or INHBE siRNA regimen. In red, we are imaging adipose tissue. And in blue, you are imaging lean muscle mass. And hopefully, it's apparent from these images that animals receiving INHBE liver silencing regimen had substantial reductions in adipose tissue gain. That's seen by quantitative analysis on the left, approximately a 22% reduction in fat mass accumulation with INHBE siRNA. And I want to highlight that should hopefully be obvious in the images as well that this was not accompanied by a change in lean muscle mass -- and we'll touch on this later, but it should be clear that in terms of quality of weight loss, it's important where that weight loss comes from. And certainly, incretin mimetics as standard of care, that weight loss is coming both from fat and lean muscle mass, which isn't terribly desirable. And in this case, certainly, phenocopying what's been shown in knockout so that the lean muscle mass is not affected. In fact, it has slightly increased. Moving on to an assessment of glycemic control. We carried out glucose tolerance tests in animals in the obese animals receiving INHBE siRNA. And we saw a trend, a modest reduction in glucose area under the curve, suggesting a modest improvement in glycemic control. These animals receiving INHBE siRNA, to silence liver INHBE -- on the high fat diet were also treated with catecholamine to stimulate lipolysis. In this case, a beta-3 agenetic agonist. And if you look at the 2 right-hand panels, the catecholamine infusion increases expression of a wide variety of lipolytic genes in various fat depots. And what we see across the board in all these lipolytic genes is that INHBE silencing in the liver resulted in enhanced lipolytic gene upregulation in inguinal and paragonatal fat depots, suggestive of increased lipid mobilization. Downstream of that, looking for evidence of increased oxidation of the free fatty acids, we see increases in key tones, in this case, beta hydroxybutyrate. So questions about increased lipid mobilization, we wanted to look and make sure or evaluate whether that increased lipid mobilization had any impact on liver fat. And in fact, we did see in H&E stains on the right, there was less liver fat accumulation in animals receiving INHBE silencing relative to saline control. So no evidence of steatosis. Trends to reductions in liver triglycerides and liver fat composition by Dexa scans. And then finally, 1 last slide introducing our ARO-INHBE candidate. These were lean cyno monkeys that received 2 dose levels of ARO-INHBE by subcutaneous injection on the first day of study and 4 weeks later. And what we're following here is serial blood draw to assess target engagement. In this case, activin E in silencing at the protein level in serum. And what we can see at the highest dose level here at 4.5 milligrams per kilogram, a nearly 80% reduction in circulating serum activin E, and that persists for a few months post cessation of dosing with a trend to recovery 2 months post dose. And with that, I'm going to turn it over to Tao Pei, my colleague, who will tell us a little bit about the adipose platform.

Thank you, Erik. So next, we'll switch gears to talk about our new TRiM platform for delivery of online therapies to adipose tissue. The reason we are treating adipose tissue, there are 2 main reasons. As mentioned earlier, 1 key reason is that adipose is therapeutically relevant to metabolic disease. Another reason for interest in adipose is that we believe is a super tissue for RNA therapy that will allow deep and long-lasting gene signage effect, similar to what we have observed in liver. We have seen huge success of RNA therapy in liver so far, and there are some interesting similarities between liver and adipose. Hepatocyte is a major cell type in liver, while adipose is major cell-type in adipose. Hepatocyte has 6 months to a year lifespan, adipose has a lifespan of several years. Therefore, if we can deliver SA to adipose, we can expect deep and long-lasting silencing factor. At Arrowhead, we have developed a TRiM platform to bring potential online therapies to adipocyte in adipose tissue. On the top right corner is our TRIM adipose platform is a dual repaid arcona with 1 LP ligand conveniently linked to the 5 prime end of sinthrome and the second lipid attached to the 3 prime end of sinthrome. Given the nature of adipose as leap storage, we want to take advantage of the lipid uptake possibly to deliver a lipid SI conjugate to adipocyte. Here on the left, we use adipocyte specific gene iconectiv or iPark here to demonstrate gene knockdown in different adipose tissue in mouse using our TRiM conduit. With a let 0.75 single subcutaneous dose, we can achieve 80% knockdown of ePort messaging on a mouse after 3 weeks post dosing. A single 3 NPK subcu dose, we can improve the knockdown to 95% of iPark meshing mouse iWatt and PG. iWatt is ingot adipose tissue, part of subcutaneous 5 here and PGW is pregoonal-wide adipose tissue part of reserve. Since I connecting protein is also secreted into blood circulation, with emotive protein reduction in serum. Here, we are able to achieve over 90% serum protein knockdown at all 3 dose levels, 0.75 NPK, 1.5 NPK and 3 NPK after a single subcutaneous administration of our TRiM adipose conjugate. Furthermore, we also find good correlation between knockdown in adipose tissue on the left and protein knockdown in serum on the right. A closer look at Mirsky and Argo confirms the SR delivery and depletion of the targeting in a deposit. At the top, we can see the red colored cyno is delivered to the adipocyte. At the bottom, we can see the brown colored connecting message RNA in adipocyte is pretty much all wiped out 2 weeks after a single subcu dose of 3 NPK of our TRiM adipose conjugate. We also test our TRiM adipose platform in duration studies in mouse. At single 2 NPK dose, the blue-collar subcu dose maintains 90% knockdown of set protein for 6 weeks and a minimum 75% knockdown for 10 weeks. The green-colored IV dose increased the duration to 10 weeks or 90% knockdown and 16 weeks or 4 months for minimum 75% knockdown of serum epo protein mouse. Next, let's review the selectivity of our TRiM adipose platform. The platform has systemic distribution with great accumulation liver, lung and mean among perfect tissues. However, despite perfect tech accumulation, we only observed significant R&E signings effect in adipose tissue. Here, we use SOD1 TIS to assess the functional tissue selectivity of our TRiM adipose platform. As 2G, SOD1 is ubiquitously expressed in multiple tissues and cell types. As the pet relevant dose, we only observed moderate to little knockdown in preferred tissues, including liver, lung and spleen. At the same time, we still maintain high 70s to 85% knockdown in Iowa and PG watt in mouse. Overall, the data indicated that our TRiM adipose platform has a very good functional tissue selectivity. Moving on to higher species, nonhuman primate. We continue to observe deep and durable knockdown of serum apart protein at a single 1.5 NPK subcutaneous dose, about 90% knockdown is achieved at 1 month post dosing. And a minimum 75% knockdown is maintained for 3 months using our TRiM adipose conjugate. Increasing the dose to 5 NPK single subcutaneous dose, we can improve the mix knock down to 98% and extend duration to 9 months with minimum 75% knockdown of serum idarotein. And finally, a yearly dosing regimen is feasible when we switch to IV dosing and increase the dose level to 10 NPK. Here, we are able to achieve 99% max knockdown and maintain 75% knockdown or higher over 16 months after single NPK IV dose the way over a year of duration. Last, but also very important, our treatable platform also demonstrates very good safety profile right in the non-GLP exploratory tox study, the rights are dosed up to 120 NPK by day 1 and day 15, and following microsite at day 16 and day 29. No mortality is observed during the study and no noteworthy clinical observation or body changes compared to vehicle. There are minimal findings in cliche, hematology and coagulation in creator pathology. No testing article-related adverse effect is found. In summary, our TRiM adipose platform has demonstrated great efficacy and doable knockdown of targeting and protein mouse and in non-tumor primate. The platform also shows good functional tissue selectivity in mouse and a good safety profile in right. So next, my colleague, Erik, will present our first adipose program towards obesity indications.

Thank you, Tao. So obviously, I'm very excited to present some preclinical pharmacology data on ARO-ALK7, our first clinical program to utilize this new and exciting adipocyte delivery platform. So this figure should be familiar. I just showed you this pathway. And again, this crucial liver to adipose tissue communication axis that has recently been defined. And again, going back to the power of human genetics to really look for what human loss of function data are teaching us about novel targets and pathways. In recent years, there have also been genetic GWAS studies demonstrating that heterozygous loss of function alleles of ALK7 are also -- this receptor are also associated with lower risks of obesity in type 2 diabetes. And I guess that shouldn't necessarily come as a surprise. So let's go back to this cartoon and talk a little bit about not this 1 ligand, but the ALK7 receptor itself. So ALK7 is a TGF-beta superfamily receptor that is preferentially expressed in adipocytes. So in order to successfully drug this, you need to be able to hit it where it lives, which again is an adipose tissue. Now activin E, of course, as I told you, is an important ligand for this receptor. But critically, there are other ligands that interact with the ALK7 receptor on adipose tissue, including other ligands that have been linked to metabolic disease and obesity, such as GDF3, GDF11, other activins and so forth. As I mentioned again, just to remind you, ALK7 signaling broadly suppresses lipolysis and shifting the balance to lipid deposition and an increase in adipocyte size. So conceptually, the approach to developing a drug here targeting ALK7 is straightforward. We utilize the new adipocyte targeting platform that Tao just described and created a highly specific and potent RNA to deliver to adipocytes and silos, ALK7 mRNA and ALK7 receptor expression on those adipocytes. And that silencing should restore lipolysis and reduce adipocyte hypertrophy in visceral adiposity. So going back to sort of preclinical context here. Of course, the ALK7 knockout mice have been studied. And in fact, the adipocyte specific ALK7 knockout mice have been studied in diet-induced obesity models. And then looking in the left-hand panel, you can see in that line that adipocyte-specific knockout mice placed on a high-fat diet do indeed gain weight at a reduced rate relative to wild-type controls. Same effect on body composition is -- is observed here just like within INHBE. This is a weight loss that occurs primarily in fat mass, no evidence of lean muscle mass being impacted with adipocyte specific knockout on high fat diet. Notably, in this particular study, they looked at oral glucose tolerance and so no impact on insulin sensitivity when ALK7 was knocked out in adipose tissue. So back to our sort of standard operating procedure here, trying to phenocopy the knockout mice with a tool trigger against ALK7 directed to adipose tissue. Again, these were -- was a high-fat diet model; diet-induced obesity, mice were placed on a high-fat diet for approximately 10 weeks or more to increase body mass and then incept a regimen of ALK7 siRNA treatment knock down ALK7 in adipose depots. And that's shown in the upper right-hand panel, with 80% reduction in ALK7 mRNA in the inguinal adipose, about 40% reduction in perianal adipose depots. But back to the left-hand panel here, looking at body weight change over the 16 weeks on drug. Saline control animals continue to gain weight, and animals on the ALK7 silencing regimen had approximately nearly a 40% suppression in body weight gain relative to controls. Now importantly, we know this results from RNA interference at the ALK7 mRNA because we are able to do a very simple chemical change to that ALK7 tool trigger, a minor chemical modification to prevent that siRNA from incorporation into the risk silencing complex. That control shown in red is unable to silence ALK7 mRNA, but in other -- in any other way, it's the same as that tool trigger. And as you see, that had no impact on changing body weight gain in this model. So looking at body composition, again, representative images by DEXA on the right, the obese mice with saline treatment, high accumulation of red fat mass. Looking at the blue lean muscle mass, it should be clear. There were reductions in fat mass on the left. Quantify that was a 50% reduction over the course of this study. And I want to highlight again, lean mass muscle mass was completely spared, while the complete loss of weight gain appeared to come from the fat mass itself. Mice on the ALK7 siRNA on the high-fat diet were also stimulated with catecholamines to look at lipid mobilization impacts. As with INHBE, saw enhanced upregulation of a panel of lipolytic genes in both adipose depots shown on the right, suggestive of increased lipid mobilization. And then, again, looking downstream to evidence of fatty acid oxidation. We do see a doubling of key tones, beta-hydroxybuterate levels substantially increased. So again, with this evidence of increased lipid mobilization, we wanted to rule out or look at the potential liver steatosis. And we saw same thing. Looking at H&E on the right, high fat diet animals treated with the ALK7 siRNA, in fact, had less liver fat accumulation than control animals, and this was correlated with a significant 67% decrease in liver triglycerides. And then finally, 1 graph I want to spend a little bit of time on is, of course, Arrowhead is very interested in studying this new platform and target in the context of existing standard of care, namely incretin mimetic therapeutics, both alone and in combination. So let me sort of walk you back and forth. And apologies, I don't have a laser pointer, so I'm going to direct you back and forth between these 2 panels. But if we look on the left, again, we have our standard diet-induced obesity mouse model where, in this case, the mice were on a high fat diet for 14 weeks prior to inception of therapy. You can see the sailing control animals continue to gain weight adding an additional 20% body weight, whereas animals with ALK7 regimen onboard to silence adipose ALX7, we saw a reduced body weight gain in the green line. And looking to the right, as I showed you before, in that second bar, that was all coming from the fat mass. So no change in lean muscle mass. So moving back to the body weight change graph on the left. We looked at tirzepatide, 1 of the cornerstone standard of care drugs administered here at a full pharmacologic dose of 0.2 mgs per kg daily. And if you look at the blue line, you can see steep and significant reduction in body weight over the first couple of weeks on drug, and we know this is due to reduced food consumption. And that's generally maintained over the course of the following 16 weeks. So that's not a surprise. But looking to the right, in the middle blue bar, in the upper panel, yes, of course, that's -- we see reductions in fat mass, but I'd again, direct your eye to the bar below on lean mass. There's also a substantial reduction in lean muscle mass. So this body weight change is coming from both of those. So we -- this really reads on quality of that weight loss. So moving back to the left-hand panel, again, I'll focus your attention on the red line where we looked at a subtherapeutic dose level of tirzepatide. So this was a 1/3 of the dose daily, so at 0.07 mgs per kg daily. Hopefully, you can appreciate that those animals did indeed lose weight fairly rapidly over the first few weeks on drugs, sort of an intermediate level of change in body weight. But that was not preserved at that drug level. In fact, from 5 weeks on, they begin to gain weight back and trend back towards baseline. So if you look to the right, again, on body composition analysis, yes, there was in that red bar, the fourth bar from the left. Fat mass was indeed reduced, not to the same level as the higher dose, but look and see that the lean muscle mass was also similarly impacted to the lean muscle mass. So a significant effect on muscle. Back again to the left, I just -- we combined the subtherapeutic dose of tirzepatide with our ALK regimen. And hopefully, you can appreciate there that when combining those 2 regimens together, we recaptured a full pharmacologic signal on body weight change as a full dose of tirzepatide. And then back to body composition in the fourth graph or the fourth column, fat mass reduction was the same as a full dose of tirzepatide, but notably with reduced impact on lean muscle mass. And then 1 last slide here on our ARO-ALK7 clinical candidates. This -- these are studies done in lean nonhuman primates. In the left-hand panel, these animals received a single 3 mg per kg subcutaneous injection of ARO-ALK7. And then we carried out serial adipose tissue biopsies over the following months. And hopefully, what you can appreciate there is that we saw rapid reduction in adipose ALK7 mRNA, deep silencing that persisted out to at least 4 months post dose with potentially some recovery beyond that. We have additional studies ongoing in nonhuman primates. One example is the study on the right, which is ongoing. I only have 8-week data to share with you. It's a dose response study. And again, hopefully, you can appreciate that much lower dose levels, as low as 0.75 mgs per kg are also mediating quite substantial reductions in ALK7 mRNA and adipose tissue in these lean primates. So with that, I'll turn it over to James, who will talk us through some of the clinical trial designs for both of these programs.

Great. Thanks, Erik. So first, we'll start with the ARO-INHBE Phase I/IIa study. This will be a clinical trial in healthy volunteers with obesity, at least initially. So BMI greater than 30. And we will start with single escalating doses and then include several cohorts on the right, the 2b, 3b and 4b cohorts, where we will investigate 2 doses given on days 1 and day 29 of ARO-INHBE. We plan to run a similar study with ARO-ALK7, again, starting in healthy volunteers with obesity. The only difference in this design is that these volunteers will undergo baseline adipose biopsies, and then we'll measure post-dose biopsies in both the single and the multiple ascending dose cohorts on days 29 and end of study for the single ascending dose in days 57 and 169 for the multiple ascending dose. And this will allow us to measure gene target knockdown in the tissue of interest. With both of these molecules, we then plan to study a part of the -- in the same 2 studies the effects of ARO-INHBE in individuals with obesity in combination with tirzepatide. So we will look at 2 different doses of tirzepatide in combination with ARO-INHBE to see the effects of the combination at the 2 separate dose levels on various biomarkers as well as body weight. And then at the bottom, the 5C cohort will look at the effects of the combination of tirzepatide with ARO-INHBE in patients with obesity as well as type 2 diabetes. Similarly, for ARO-ALK7, we will duplicate these 3 cohorts in obese patients at 2 different dose levels and then also cohort of obese patients with type 2 diabetes. Again, the only difference here versus the ARO-INHBE study being that these patients will all undergo predose and post-dose adipose biopsies. And then finally, the primary and secondary endpoints will be pretty standard for a Phase I study than the pharmacologic endpoints will be slightly different between the ARO-INHBE study in the ARO-ALK7 study. In the ARO-INHBE study, we will evaluate serum active levels as a biomarker of gene target silencing in the liver. And then in the ALK7 program, again, we will measure adipose knockdown of the gene target using biopsies. Then otherwise, the pharmacologic endpoints will be similar. We'll look at changes in weight, changes in waist circumference, changes in body composition based on MRI. And on that same MRI, we will be able to evaluate changes in liver fat. And then we have a fairly extensive panel of metabolic parameters, lipid parameters and glycemic control parameters that will measure in the patients and the healthy volunteers with obesity in both studies. And so with that, I'll hand things back to Vince.

Thanks so much, James, and thanks for -- the entire panel. There's a lot of really good information today. Okay. So what have we learned and what's important to Arrowhead. So it is clear, and Dr. Le Roux talked about this, and I think it's clear from our experience with the successful agents that obesity is not 1 disease. It's multiple diseases. And in addition, it increases the risk of serious downstream metabolic diseases like diabetes and heart disease, stroke and more. And we think, and at least the data so far and other agents has proven this out, that reducing fat mass may ultimately improve patient outcomes in the long run and potentially dramatically. That's the goal. Second, it has become clear -- and this has not been historically true -- that this is not a market -- a pharmacotherapy market driven by aesthetics or weight loss. That's -- the weight loss is basically a marker for what we expect long-term health outcomes to benefit. And that, again, that's the long-term goal of obesity and metabolic disease therapies to improve long-term health outcomes. And 1 important part is that payers and the health system agree with this. And that's been a big question in this space for a long time is -- is if you have effective therapies that are safe, that are well tolerated and that can have dramatic levels of weight loss, will they be reimbursed? And will payers here -- commercial payers here in the U.S. And then also around the world, will they reimburse this product and pay for it? And I think that it's become clear that is true. Next, the -- we believe, and again, Dr. Le Roux is an expert in this, and so we deferred to his opinion on this. But new therapies have, over the last handful of years, made an enormous impact in this space. And where the opportunities still lie is in novel new mechanisms. Second, in therapies that can better maintain lean mass and importantly, improve body composition. And third, therapies that can address the gastrointestinal AEs that we see in clinical studies. And then even more starkly once these therapies are used long term, how many patients are really staying on the GLP-1 long term. So we believe that the genetics and the biology of these pathways support the idea that INHBE, the gene and the activin E ligand and the ALK7 receptor pathway are active here. And it's something that we should explore inhibiting that pathway. And I think the important thing to think about here, the basic idea is that we are -- we're doing 2 things. ARO-INHBE is turning off the gene that sends the message to the body to store more fat. And then ARO ALK7 is turning off the way that tissue receives that message. And so we're kind of trying to do the same thing in 2 different ways. And I think there's a lot of good precedent with pharmacotherapy with this basic strategy. If you look to monoclonal antibodies, you think about when you're designing an antibody, do you want to address the ligand or the receptor? And with the ligand, you have an antibody that's a trap, you trap the ligand. Or you have an antibody that's a blockade on the receptor. That's the same idea with this, is what's going to be the more effective way to get to this signaling. And I think that we have a way to address both, and we'll learn which is the more effective way shortly. And again, as we've seen, the preclinical data have been really very promising for both of these programs. And I hope that it shows that we tried to do the same studies head-to-head just to see if there was 1 clear advantage here. And I think that both of them are both very compelling. And the upcoming clinical studies will show where both of these fit. And I think that Arrowhead as a company, we think that we are first -- we believe first-in-class in the clinic for both of these. And as with all of our programs, our goal is to be best in class as well. And this is near term. These are -- you're just hearing about these data now, but these are not early programs. We're in the final stages of preclinical development, and our plan is to file CTAs before the end of the year and to start clinical studies for both of these shortly thereafter. And James indicated -- these first-in-man studies, they are not simple safety studies. We're going to learn a lot in these first-in-human studies. We're looking at single doses. We're looking at multiple doses in an obese population. And we're also looking at combination therapy with tirzepatide. So there's a lot of data that's going to come out of both of these programs over the next 12 months or so. So with that, again, I want to thank all the panelists and we are going to open up the call to some questions. So give me a moment as I compile some of those questions. Okay. As if anybody has seen our prior -- prior R&D webinars, we're going to get way, way more questions that we'll be able to get to, but I'll try to take as many as possible.

So the first question comes from Patrick Trucchio at H.C. Wainwright. The question is, we understand that part of weight loss achieved with GLP-1 agonist is coming from loss of lean mass, but do we understand which type of adipose tissue is driving the fat loss? And I guess I'll ask our team first and then turn it to Dr. Le Roux as well.

Yes. I guess I can jump in here. Thanks, Vince. So obviously, I'll make sure Dr. Le Roux has a chance to weigh in as well. But our understanding of GLP-1s from the studies that have been done suggest that weight loss or the fat mass loss comes from all adipose depots. Now some studies have shown that some, but not all have shown that visceral adipose depots, which we know are the ones closely associated with metabolic arrangements and the metabolic syndrome may be more affected than subcutaneous depots, but that hasn't been shown in all the studies. I think looking -- tying this back to ARO-INHBE and ARO-ALK7, 1 of the striking things from the genetic data that Erik had described is that measures of visceral adiposity seem to be more affected in these patients with predicted loss of function mutations. And that's looking both at surrogates of vicerlatopostity, including waste to hip ratio as well as MRI measures of visceral adiposity, and looking at gluteofemoral adiposity. So maybe that's -- I'll pass it to Dr. Le Roux for his thoughts as well.

No, I agree with all of that. But just to add that it also depends on when you look at the weight loss. So the initial weight loss, you effectively get most of the fat we lost from the liver, then visceral fat and then subcutaneous. But once you actually become stable, you reach the plateau, you generally revert back to the ratio of subcutaneous to visceral fat that you had before you started. So initially, you lose mostly organ fat, then visceral fat, then subcutaneous fat. So you have to just make sure when you actually are looking at that.

Next question comes from Andrea Tan at Goldman Sachs. Mechanistically, is targeting ALK7 receptor or activin E ligand a better approach to modulate this pathway?

I don't think we know that yet. And that's 1 of the reasons to study both of them in the clinic. Targeting INHBE is very specific for that 1 gene product. INHBE and activin E targeting of the ALK7 receptor will block its ability to bind not just the activin E ligand, but also other ligands that may be binding to ALK7. So there may be a broader effect by targeting ALK7.

Erik, what do you...

No, I'd agree with that. I mean, empirically, we're going to have to work this out. This is a new pathway that's been recently uncovered. I think we're guided at the core by the human genetics. And reassured by the human genetics, and we intend to answer the question based on the human genetics.

Next question comes from Jason Gerberry at Bank of America. Given the mechanism of both approaches are independent of food intake, how do you think about the risks trial subjects adopt a more liberal diet and consumption that negates fat loss benefit? I guess I will turn that to Dr. Le Roux to see what has been their experience in clinical trials of other agents.

Yes. So I'm yet to meet a person that wants to have the disease of obesity. So we have this idea that people will just let go and -- but actually, that's the benefit of actually framing it as a disease. It's a little bit like when you tell somebody for the first time that they have type 1 diabetes and you're going to treat them with insulin, they don't rush off to the candy store to get some more sugar intake. They understand this is a serious disease, they take control of it. And I think with these medications, you allow people control. And that is the 1 thing that people want more than anything. Now once they have control of the disease, then we need to amplify the health benefits by better diets and better exercise program. So I think that is the benefit of treating. And I think finally, I would say that's the 2 concepts that we talk about: 1 is the disease of obesity. And the second is the cultural desire for thinness. So people who want to look different when they look in a mirror and typically, payers won't pay for that. But payers will pay for people to actually have health gains, and that's where these medications would be focused on.

Next question comes from Brendan Smith at TD Cowen. How do you expect the dosing interval data to translate from mice to humans? And do you expect 3-, 6-, 9- or 12-month dosing in humans will be possible?

Yes, I'd be careful on -- yes, the mouse is just a tool trigger, right, James? So...

Yes, we tend to -- when we set dose intervals in the clinical trials, we'd look at the cyno more so. And of course, our other GalNAc programs where we typically are able to dose less frequently than Q3 month. So -- and we typically gain a little bit of duration and depth when we go from the monkey into the clinic. So I think we'd be looking at maybe somewhere in the Q3 to Q6-month duration for INHBE. For ALK7, that could be longer based on the monkey data. But I think that's something we'll have to sort out in Phase I, what the duration looks like after a single dose.

Thank you. And there's a related question to that. This is from Maurice Raycroft at Jefferies. What knockdown in biopsy tissue do you think you need to achieve? And I'm assuming he means ALK7. And where would you get the biopsies from?

Yes. So we're finalizing the biopsy protocol now. I think we are looking at sites -- abdominal sites, sites on the back as well and potentially the thigh as potential biopsy sites. And then the question of how much knockdown do you need, I don't think it's totally been established. Erik, what -- based on the human genetic data, what do you think?

Yes, human genetics, again, we're triangulating. But certainly, the putative loss of function data that we were citing there with protection against obesity. These are heterozygous, right? And so your dosage may vary a bit. So we anticipate less than -- certainly less than deep knockdown may be sufficient. So I guess...

Yes, better than 50% would be the minimum threshold. I think we'd be targeting something more like 80%.

Yes.

Thank you. Next question is from Mayank Mamtani at B. Riley Securities for Dr. Le Roux. What obesity disease subpopulations where you see more need for CBD disease management that you aren't seeing well addressed by -- by existing therapies where, obviously, they don't get good lipid management?

Yes. So that's the real challenge for us, is that I have seen thousands of patients with obesity, and I have no ability to predict which patients will respond to treatment A or treatment B. So effectively, what we are doing at the moment is we are using a trial of therapy of 3 months or we call it a diagnostic phase where we would start the treatment, and we will be able to predict long-term outcome by the way people respond in the first 3 months. So what I think will happen in the future is that we will start our treatments and at 3 months make a decision if somebody is responding or not responding and change until such a time as we get better diagnostics. But I think the more critical question now is that at the moment, we don't have patient choice. And once you actually start explaining to patients about different mechanisms, then you actually find that people actually buy into different treatments and what we do in our clinical practice is we provide -- we empower the patients to make those choices. But if they don't respond to the treatment, we know there's something else to go to. Now at the moment, we are a bit -- we don't have that much else to go to, and that's why we need more treatments so that we can offer that to patients. So ultimately, we will get better diagnostics to help us decide which patients will respond to treatment A or treatment B. But until that time, we can tell within 3 months how patients respond.

Thank you. This is a question from Will Pickering at Bernstein. What are some pros and cons of this pathway versus myostatin and/or activin-A?

Erik, resuming?

So for myostatin, the obvious benefit is increase in mass. The fat mass decreases relatively mild. So for 7 and activin E, we clearly show pretty robust decrease in the fat mass and preserve in lean mass.

About for activin A, any -- any thoughts on advantages or disadvantages with that target? It's more of a muscle target, I think, right?

That's correct. So for activin A, we have in clean the data to support that. Actually, the muscle activin A inhibition alone less robust flex than myostatin. So they are in the same family, but there are sort of differences.

Thank you. Next question from Ted Tenthoff at Piper Sandler. What talks might you expect or be aware of -- I would actually say we don't expect that, but what we would be aware or looking for from the ligand -- INHBE, I'm assuming he means -- and from ALK7 target biology? So what are we on the lookout from a tax standpoint here?

Yes. I think like you said, Vince, based on our experience in non-GLP and GLP talks, what we have available to date, we wouldn't expect anything. But I think whenever you modulate these types of pathways. Looking for any type of adverse changes in either lipid parameters or measures of glycemic control are probably important things to look at. So blood sugar, A1c, what's happening to triglycerides, LDL cholesterol, that sort of thing, what's happening to liver fat. That's 1 of the reasons why we included that in our clinical trial as an exploratory endpoint, we measure liver fat. And it will be interesting to see if liver fat goes down. But what we really don't -- we really care about it is it not going up. So I think that's probably the best answer I can give at this time.

Thank you. Next question is from Ellie Merle at UBS. Activin E influences the cardiovascular system, including heart function and vascular biology. How do you think about potential risks for cardiovascular dysfunctions such as hypertension or impaired regulation of vascular tone and heart function?

Zi Mei or Erik, do you want to take a first shot at that?

Well, let me take first shot. So from genetic evidence and preclinical evidence, we have not find any say that inhibition of activin E will negatively affect blooper cardiovascular disease. So of course, we need to keep a close eye on it. But so far, there's no flat.

Yes, even through our exploratory toxicology studies in that. Yes.

Next question from Mani Foroohar at Leerink. After initiating Phase I studies, what would be the time line to be -- to the first data readout? Can we think of this as a 2025 event? And what should we expect to be included in the first data set for each? And I'll take a first pass at that, and then James, you can fill in the holes. So the -- as we mentioned that our goal is to get the CTAs filed before the end of the year and start the clinical studies shortly thereafter. Now the clinical studies are designed to get to lots of answers in kind of, again, with single-dose monotherapy, multiple dose monotherapy and then also in combination with tirzepatide. So we will learn a lot more in this study than your typical first-in-man study. So James, you want to kind of fill in time lines on this, assuming we get these up and running early in '25?

Yes. I think that these should be pretty straightforward to enroll both studies. So yes, I think by second half of 2025, something like that, we should be in a position where we can start to share the biomarker data as well as some of the weight loss data imaging data.

Thank you. Next question is from Jay Olson at Oppenheimer. What clinical benefits would be driven by preservation of lean muscle mass and what clinical endpoints would you use to measure those benefits? And I would actually first ask Dr. Le Roux that. What would you expect? You did mention that that's 1 of the big to-dos for pharmacotherapy is find ways to maintain and preserve lean mass. What are the downstream benefits of that?

Yes. So ultimately, the downstream benefit will be improvement in function. So the amount of mass that people carry is not that critical, but what they can do with it is really important. And therefore, what we are currently focusing on is that when people do lose muscle mass, what's the quality of the muscle afterwards. And we know that if we treat obesity, we reduce inflammation. And the muscle mass, therefore, actually improves in quality, even though there's less of it. Now in this situation, where you would actually reduce adipocyte, you will also reduce adipocyte inside the muscle. So most of us maybe on the weekend, had a nice ribeye steak, and you would remember that there was actually some fat cells inside the muscle. Now if you're going to target the adipocyte, you're also going to reduce that. So you're going to improve the quality of the muscle in this instance while not losing lean mass. And that's going to be an advantage. So it's not going to be about measuring the amount of muscle, it's going to measure the quality of muscle by testing the function and whether or not that's on a 6-minute walk test or a sit to stand test. That's where there's currently a lot of discussion in how we are going to standardize those measurements going forward.

Thank you. And we only have time for 1 more question, and we'll pick 1 that I think both Dr. Le Roux and the panel will have an opinion on. So this is from Maurice Raycroft at Jefferies. And I will paraphrase this. So where would this be used? And actually, I'll first pose that question to Dr. Le Roux. So provided we have 1 or both of these agents that have a clinical profile that's similar or matches what we've seen preclinically, where would these agents fit in the current standard of care? Maintenance therapy, upstream, downstream in combination? How do you see the spending?

First of all, I think we need to get double-digit weight loss. So if we get 10% weight loss, you have a ball game. Now if you get 15% weight loss as it suggests that 15%, 20% weight loss as is suggested by the Phase I or the animal data, then what you will have, it could either be a first-line treatment or it can act as in combination with another medication that already you have in play. And think about how we treat hypertension. You may start with an ACE inhibitor, but you will add in a second-line agent if you don't have full control. But other patients may start with the calcium antagonist for example, and add in an ACE inhibitor. So I think this has a potential for both a first-line agent, but certainly in a combination. Because remember, at the moment, obesity is the only chronic disease that we don't yet have a target for. So we talk about percentage weight loss if that's a target. But we don't talk about percentage hemoglobin A1c reduction or percentage millimeters in mercury for blood pressure. We talk about treating to target. And I think that is what's going to happen in the next 1 or 2 years in obesity medicine is we're going to work out what those targets are. And therefore, I think combination therapies are going to be far more common than they are at the moment.

And then maybe, James, if you can talk a bit about our strategy for clinical development?

Yes. I think as we laid out in the slides, I mean, we want to understand how the drugs work as monotherapies, but also in combination. And just as Dr. Le Roux had mentioned, I mean, we're considering both of those pathways as paths for further development post Phase I. But we kind of need to see the data first to make the call.

Thank you. And again, thanks to the entire panel, especially Dr. Le Roux, for joining us today was very, very helpful. I appreciate it. And everybody out at home, thanks so much for spending the time, and we will see you next month at the final installment of the Summer Series where we talk about our CNS platform. Thank you.